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Thursday, 10 August 2017

Finance: An unprofitable yoga chain is making a 2nd attempt at an IPO — for way less money

Just three weeks removed from pulling its first attempt at an IPO, YogaWorks is trying again, but at two-thirds of the potential valuation previously sought.

YogaWorks isn't ready to give up on its dreams of going public.

Just three weeks removed from pulling its first attempt at an IPO, citing market conditions, the chain of 50 studios spread across six US metropolitan areas is giving it another shot.

But there's a catch: the company is now trying to raise just two-thirds of the capital previously sought.

Yogaworks' revamped offering is for up to 7.3 million shares priced between $5.50 and $6.50, according to a filing with the US Securities and Exchange Commission. The revised pricing amounts to a possible valuation range of $40 million to $47 million.

That's a far cry from its earlier attempt, which saw the company attempt to offer 5 million shares at a price between $12-14 per unit — a market value of $60 million to $70 million.

While some might attribute YogaWorks' difficulties to a tough IPO environment that most recently saw meal kit maker Blue Apron limp to the finish line, it's also possible potential investors just weren't sold on the company at that original valuation. After all, the company is unprofitable at the moment, posting net losses in each of the last two years, as well as in the first quarter of 2017.

It remains to be seen whether YogaWorks will have more success at a more modest offering price. If they find themselves unsuccessful again, it might be time to ask whether a third time's a charm, or if they're better off staying private.